Health Care and the Limits of Democracy

November 25, 1993|By TRB

WASHINGTON — Washington.--Critics who complain that President Clinton's health-care plan has ''too much government'' are onto something, but they don't have it exactly right. The problem isn't too much government; it's too much politics. The Clinton plan will force society to make explicitly, through the political system, decisions on painful questions like limiting choice and rationing care that will be made in any event.

Alternative plans will make these same decisions covertly, and possibly less sensibly. Nevertheless, asking politics to do more than it can is a real defect in the president's scheme. The fact that rival schemes obscure these unpleasant decisions may be a real virtue.

Complaints that Mr. Clinton's plan would ''socialize'' one seventh of the economy are ridiculous. Rival plans also posit a massive new government role. In terms of ''big government,'' the differences among the various alternatives (except for the Canadian option) are minor compared with the difference between where we are now and where all the plans would take us.

Consider the so-called ''Consumer Choice Health Security Act,'' introduced November 18 by several conservative Republican senators. It now represents the right flank of opposition to President Clinton. By forbidding insurance companies to discriminate against bad risks, the ''Consumer Choice'' plan would effectively socialize health-care costs by government fiat, although not through the tax system.

This plan even requires insurance premiums to be deducted from payroll checks -- just like a tax, but don't call it one. The plan also requires every citizen to purchase a minimum amount of health insurance. Employers aren't required to supply insurance, as in the president's plan, but they are required to offer employees cash instead of any insurance they choose to offer. All these new mandates will require complicated regulations to interpret them.

The ''Consumer Choice'' plan would replace the employer deduction for health-care with a tax credit to individuals. This would amount to a tax increase for many folks, and even so the plan comes up about $45 billion a year short, which it gets out of Medicare and Medicaid.

However, the ''Consumer Choice'' plan obscures some unpleasant consequences that are clearer in the Clinton plan. For example, Mr. Clinton's plan puts almost everyone into a regional health care ''alliance.'' The boundaries of the alliances have already become a nasty political decision; if your alliance includes New York City, with higher costs and sicker people, your insurance rates will be higher than if your alliance just includes the suburbs.

But defining the risk pool is inevitable in any scheme that pools the risks, which they all do. The ''Consumer Choice'' plan does not allow healthy consumers the ''choice'' of going uninsured, or of insuring with a company that doesn't have to take sick people at the same price. It does allow insurers to discriminate on the basis of ''geography,'' which means that someone will have to decide what constitutes a permissible geographical unit. Without the big hoo-hah about ''alliances,'' though, this decision could grease through the system without much trouble.

Mr. Clinton's ''alliances'' will also get blamed when, inevitably, more and more people find themselves in HMOs and other arrangements that limit their choice of doctors. The Clinton plan promises that each alliance will be required to continue offering a traditional ''fee-for-service'' option, but the relative price of that option could make it impractical for most people. The same will happen with no reform and certainly under the ''Consumer Choice'' plan -- the whole idea of which is to save money by making consumers more sensitive to what their health care is costing. But the government won't get the blame, which is a plus.

The most agonizing issue in health care is ''rationing'' -- denying people treatment that has some value, to save money. The president's plan is the only one that sets a total national health-care budget. Critics say this will lead to rationing, as costs exceed the budget and people are denied various services in order to meet the target.

Health care takes 14 percent of American GDP, compared with 8 or 9 percent in other advanced countries. Mr. Clinton is prepared to see the figure go to 17 percent. Given those figures, it's not clear to me that denying people useful care will necessarily be required. What is clear is that expecting Americans to deal explicitly with that question is expecting too much.

The alternative plans are no less likely to lead to health-care rationing than Mr. Clinton's plan -- if they are going to be successful in holding down costs -- but their rationing would be harder to spot (like the rationing that already goes on). Under the ''Consumer Choice'' plan, it will happen in the interstices of the system. Consumers, who are encouraged to be uninsured for the first several thousand dollars of annual health expenses, will avoid treatment to save money. Insurance policies for major illnesses will exclude this or that therapy.

The problem with the Clinton health-care plan, in short, is not that it nationalizes too much but that it rationalizes too much. With its boards and alliances, it makes clear what is better left murky. Democracy, or at least American democracy, can only do so much.